The producers’ cartel OPEC is not expected to cut the amount of oil its putting out as a result of the meeting at its headquarters in Vienna, despite prices for crude falling to new five-month lows.
OPEC President Chakib Khelil said output is likely to be held steady. He added the fact that the US dollar is at its strongest in a year is a big factor: “What we are seeing now is that the inverse relationship between the US dollar and the oil price is being verified. The dollar is strengthening and the oil price is going down.”
The largest producer, Saudi Arabia, said it is satisfied with the recent big slide in oil prices and that the market is “well balanced.”
In 2006 OPEC pumped 26.3 million barrels per day which rose to 27.2 million last year.
In August 2008 it is estimated that OPEC members’ output – including Iraq – averaged 32.8 million barrels per day.
That is 780,000 barrels per day above OPEC’s output target and some members want all countries to keep to the agreed limits, which would reduce supplies and support prices.